American Electric Power

American Electric Power (AEP) is a major investor-owner electric utility operating in various parts of the United States. It is headquartered in Columbus, Ohio. It serves parts of 11 states, and is currently the largest electricity generating utility in the United States.

Overview
The company is divided into seven major geographic local operating companies:
 * AEP Ohio, made up of the former Ohio Power and Columbus Southern Power Company
 * Appalachian Power Company, serving West Virginia and Virginia
 * Indiana Michigan Power
 * Kentucky Power
 * Public Service Company of Oklahoma (PSO), and
 * Southwestern Electric Power Company, often called SWEPCO, serving Arkansas, Louisiana, and eastern Texas
 * AEP Texas Central Company (TCC), formerly Central Power and Light Company, and AEP Texas North Company (TNC), formerly West Texas Utilities Company

In addition, two smaller divisions, Wheeling Power Company (serving Wheeling, West Virginia) and Kingsport Electric Power (serving Kingsport, Tennessee), are operated as de facto parts of AEP Ohio and Appalachian Power, respectively.

AEP owns and operates the Donald C. Cook nuclear power plant.

AEP also bought much of the town of Cheshire, Ohio, after it had become contaminated.

The company also operates its own inland barge line, AEP River Operations (fomerly MEMCO Barge Line), and owns major tracts of land throughout its service areas.

CEO compensation
In May 2007, Forbes listed AEP CEO Michael G. Morris as receiving $13.05 million in total compensation for the latest fiscal year, with a three-year total compensation of $22.03 million. He ranked 3rd on the list of CEOs in the Utilities industry, and 137th among all CEOs in the United States.

Workforce cuts
On April 14, 2010, AEP sent letters to all of the company's employees offering to buyout between 1,000 and 2,000 workers. The cuts would reduce the company's workforce, which now stands near 22,000 in eleven states, by up to 10 percent. Employees were given until the end of April to decide, with jobs terminating by the end of May. The buyout includes "a lump-sum payment of two-weeks of pay for each year of service, with a minimum of eight weeks' pay" and "up to 18 months of reduced-cost medical and dental coverage."

The company may turn to layoffs if too few workers accept the buyout. The cuts follow a time of expansion for AEP; between 2005 and 2008, the company added about 2,300 new jobs. Utility companies Dominion Resources and Duke Energy also announced cuts at the same time.

AEP Cuts 10 Plants to Part-time
On May 27, 2010 AEP announced that they would move ten of their coal-fired operating units to part-time operating status due to a reduction in energy demand, as well as low natural gas prices. The plants primarily include older facilities based in Ohio, Virginia and West Virginia.

EPA releases list of 44 "high hazard" coal ash dumps
In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. AEP owns 11 of the sites.

The following table is derived from EPA's official list of Coal Combustion Residue (CCR) Surface Impoundments with High Hazard Potential Ratings. To see the full list of sites, see Coal waste.

Issues at AEP surface impoundments in West Virginia
An engineering report submitted to EPA in November 2009 recommended upgrading the rating of two surface impoundments at the Philip Sporn Power Plant in West Virginia from "poor" to "fair." Engineers from Dewberry, an EPA contractor, said the dams were likely to hold in the event of an earthquake, but that repairs and additional tests were still necessary. EPA said it would consider the recommendations, and AEP said it would conduct further tests at the site. In addition to these investigations, the Department of Environmental Protection also discovered two nearby coal ash dams that officials were not aware existed, and that did not meet state safety regulations.

Flint Creek ranked 96th on list of most polluting power plants in terms of coal waste
In January 2009, Sue Sturgis of the Institute of Southern Studies compiled a list of the 100 most polluting coal plants in the United States in terms of coal combustion waste (CCW) stored in surface impoundments like the one involved in the TVA Kingston Fossil Plant coal ash spill. The data came from the EPA's Toxics Release Inventory (TRI) for 2006, the most recent year available.

Flint Creek Power Plant ranked number 96 on the list, with 221,456 pounds of coal combustion waste released to surface impoundments in 2006.

Coal Ash Waste and Water Contamination
In August 2010 a study released by the Environmental Integrity Project, the Sierra Club and Earthjustice reported that Arkansas, along with 34 states, had significant groundwater contamination from coal ash that is not currently regulated by the Environmental Protection Agency (EPA). The report, in an attempt to pressure the EPA to regulate coal ash, noted that most states do not monitor drinking water contamination levels near waste disposal sites. The report mentioned Arkansas based Flint Creek Power Plant and the Independence Steam Station were two sites that have groundwater contamination due to coal ash waste.

Study finds dangerous level of hexavalent chromium at Flint Creek and Conesville waste sites
A report released by EarthJustice and the Sierra Club in early February 2011 stated that there are many health threats associated with a toxic cancer-causing chemical found in coal waste called hexavalent chromium. The report specifically cited 29 sites in 17 states where the contamination was found. The information was gathered from existing EPA data on coal ash and included locations in Alabama, Arkansas, Delaware, Florida, Illinois, Indiana, Minnesota, Massachusetts, North Carolina, North Dakota, Nevada, Ohio, Oklahoma, Pennsylvania, Tennessee, Virgina and Wisconsin. AEP'sthe Flint Creek Power Plant and Conesville Power Plant were noted as having a high level of chromium at their coal waste landfills.

According to the report, the Flint Creek coal ash site is a landfill. Hexavalent chromium (Cr(VI)) was reported at the site above 128 ppb (parts per billion) - 6,400 times the proposed California drinking water goals and 1.28 times the federal drinking water standard. AEP's Conesville Power Plant coal ash site is also a landfill. Hexavalent chromium (Cr(VI)) was reported at the site at 100 ppb (parts per billion) - 5,000 times the proposed California drinking water goals and above the federal drinking water standard.

As a press release about the report read:


 * Hexavalent chromium first made headlines after Erin Brockovich sued Pacific Gas & Electric because of poisoned drinking water from hexavalent chromium. Now new information indicates that the chemical has readily leaked from coal ash sites across the U.S. This is likely the tip of the iceberg because most coal ash dump sites are not adequately monitored.

According to the report, the electric power industry is the leading source of chromium and chromium compounds released into the environment, representing 24 percent of releases by all industries in 2009.

Death and disease attributable to fine particle pollution from AEP coal plants
In 2010, Abt Associates issued a study commissioned by the Clean Air Task Force, a nonprofit research and advocacy organization, quantifying the deaths and other health effects attributable to fine particle pollution from coal-fired power plants. Fine particle pollution consists of a complex mixture of soot, heavy metals, sulfur dioxide, and nitrogen oxides. Among these particles, the most dangerous are those less than 2.5 microns in diameter, which are so tiny that they can evade the lung's natural defenses, enter the bloodstream, and be transported to vital organs. Impacts are especially severe among the elderly, children, and those with respiratory disease. The study found that over 13,000 deaths and tens of thousands of cases of chronic bronchitis, acute bronchitis, asthma, congestive heart failure, acute myocardial infarction, dysrhythmia, ischemic heart disease, chronic lung disease, and pneumonia each year are attributable to fine particle pollution from U.S. coal plant emissions. These deaths and illnesses are major examples of coal's external costs, i.e. uncompensated harms inflicted upon the public at large. Low-income and minority populations are disproportionately impacted as well, due to the tendency of companies to avoid locating power plants upwind of affluent communities. To monetize the health impact of fine particle pollution from each coal plant, Abt assigned a value of $7,300,000 to each 2010 mortality, based on a range of government and private studies. Valuations of illnesses ranged from $52 for an asthma episode to $440,000 for a case of chronic bronchitis.

Table 1: Death and disease attributable to fine particle pollution from American Electric Power coal plants
Source: "Health Impacts - annual - of Existing Plants," Clean Air Task Force Excel worksheet, available under "Data Annex" at "Death and Disease from Power Plants," Clean Air Task Force. Note: This data includes the following plants owned by AEP and subsidiaries Appalachian Power, Cardinal Operating Company, Central Operating Company, Columbus Southern Power Company, Indiana Michigan Power, Kentucky Power Company, Ohio Power, Southwestern Electric, and Public Service Company of Oklahoma: Clinch River, Glen Lyn, Amos Plant, Kanawha, Mountaineer Plant (Appalachian Power Co); Cardinal, (Cardinal Operating Co.); Philip Sporn, (Central Operating Co); Conesville, (Columbus Southern Co); Tanners Creek, Rockport Plant, (Indiana Michigan Power Co); Big Sandy Plant (Kentucky Power Co.); Gavin Power Plant, Kammer Plant, Mitchell Plant, Muskingum, (Ohio Power Co); Northeastern Station, Riverside Power Plant, (Public Service Company of Oklahoma), Flint Creek, Pirkey and Welsh, (Southwestern Electric Power Co).

AEP raises rates in Ohio
On March 18, 2009, the Ohio PUC approved rate increases for two AEP companies, but the hikes are only about half of of what the utility had requested. Columbus Southern Power customers will face a maximum increase of 7 percent in 2009 and 6 percent in both 2010 and 2011. Ohio Power customers will face a maximum increase of 8 percent in 2009, 7 percent in 2010, and 8 percent in 2011.

Ohio Supreme Court rules rate hikes unlawful
On April 26, 2011, the Office of the Ohio Consumers' Counsel (OCC) and additional customer groups filed a request with the Public Utilities Commission of Ohio (PUCO) to stop the collection of $175 million in electric rates, in response to an April 19, 2011 Supreme Court of Ohio unanimous decision that AEP was unlawfully allowed to increase several rates. The Court ruled in favor of the OCC in agreeing that AEP's 2009-2011 rate plan was unlawful by including $63 million in retroactive rates, $456 million in costs to potentially provide default service for customers who shop for an alternative supplier and $330 million in carrying charges for environmental investments. The groups joining the OCC in the suit include the Ohio Energy Group, Ohio Partners for Affordable Energy, Ohio Manufacturers' Association and the Ohio Hospital Association. The charges ruled unlawful included compensation for AEP's perceived risk as a back-up provider of electricity for shopping customers and carrying charges on environmental investments made prior to Jan. 1, 2009. Both charges continue to be collected from customers, at an estimated rate of $22 million per month, according to PUCO. The Court remanded the two issues to the PUCO for further consideration.

Power portfolio
Out of its total 35,843 MW of electric generating capacity in 2005 (3.36% of the U.S. total), AEP gets 69.0% from coal, 22.2% from natural gas, 6.4% from nuclear, and 2.3% from hydroelectricity. AEP owns power plants in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Texas, Virginia, and West Virginia.

AEP announced in October 2010 that it was going to seek to reduce 5,000 megawatts of coal power from its operating units. The utility stated that it receives 5,000 megawatts of generation from smaller, older and less-efficient coal fired units and that there is not economic justification to retrofit them with environmental upgrades. AEP also stated that it was evaluating whether to retire and replace another 10,000 megawatts of power generation.

Congressional campaign contributions
American Electric Power is the single largest energy contributor to both Republican and Democratic candidates for Congress. These contributions total $597,881 to the 110th US Congress (as of the third quarter of 2008), the largest of which has been to John Boehner (R-OH) for $25,050. Rep. Boehner, for his part, has consistently voted with the coal industry on energy bills.

Contributions like this from from fossil fuel companies to members of Congress are often seen as a political barrier to pursuing clean energy. 

More information on coal industry contributions to Congress can be found at FollowtheCoalMoney.org, a project sponsored by the nonpartisan, nonprofit Oil Change International and Appalachian Voices.

Coal lobbying
American Electric Power also spent $80,000 on Compass Consulting Group in 2008 and a further $20,000 to date in 2009. The registered lobbyists were Ted Hollingsworth, Thomas F. Needles and Patrick A. Smith.

American Electric Power also spent $580,000 on Sidley Austin LLP in 2008 and a further $10,000 to date in 2009. The registered lobbyist was Andrew Shoyer.

American Electric Power also spent $350,000 on Van Ness Feldman in 2008 and a further $50,000 to date in 2009. The registered lobbyists for the first three-quarters of 2008 were Stephen Fotis, Todd Wooten and Tracy Nagelbush. The registered lobbyists for last quarter of 2008 were Fotis, Wooten, Nagelbush and Robert Nordhaus. The registered lobbyists for 2009 were Fotis and Nagelbush.


 * Total Lobbying expenditures for 2008: $12,248,938
 * Total Lobbying expenditures to date for 2009: $1,796,913

American Electric Power is a member of the American Coal Ash Association (ACAA), an umbrella lobbying group for all coal ash interests that includes major coal burners Duke Energy and Southern Company as well as dozens of other companies. The group argues that the so-called "beneficial-use industry" would be eliminated if a "hazardous" designation was given for coal ash waste.

ACAA set up a front group called Citizens for Recycling First, which argues that using toxic coal ash as fill in other products is safe, despite evidence to the contrary.

Environmental record
Researchers at the University of Massachusetts Amherst have identified American Electric as the 35th-largest corporate producer of air pollution in the United States, with roughly 88 million pounds of toxic chemicals released annually into the air. Major pollutants indicated by the study include sulfuric acid, chromium and nickel compounds, hydrochloric acid, and manganese compounds. Overall, electric power plants, such as those operated by AEP, account for almost "70 percent of sulfur dioxide emissions each year and 30 percent of nitrogen oxides emissions." Individually, these pollutants cause serious respiratory damage and other illnesses; when combined, they create what's known as acid rain, which causes long term damage to the environment and deterioration of natural and man-made structures. U.S. Environmental Protection Agency has named American Electric a potentially responsible party at the Green River Disposal Inc. Superfund toxic waste site.

July 10, 2006: Earth First!/Rising Tide blockade of Clinch River Power Plant
On July 10, 2006, 75 Earth First! and Rising Tide North America activists blockaded an access bridge leading to American Electric Power's coal-fired Clinch River Power Plant near Carbo, Virginia. Several people stretched a rope across the bridge and suspended themselves off the bridge's edge; others waved a coal truck onto the bridge, blockaded it, deflated its tires, and locked themselves to the truck. The protestors demanded that Clinch River and other outdated coal plants be shut down, and that mountaintop removal coal mining be ended. After several hours in which coal trucks were unable to get into the plant, police agreed to make no arrests if the activists would dismantle their blockades.

Pike County residents sue AEP for illegal mining that aggravated flooding
In August 2010, 126 people at mine sites near Harless Creek in Pike County filed a lawsuit against AEP Kentucky and Cambrian Coal after inspectors cited the coal companies for violations in the area, which residents say flattened and eroded the landscape and contributed to the flooding and damage of their property. The companies were mining on the nearby mountains. State inspectors cited Cambrian Coal the week after the flood for having too much sediment in one pond and allegedly mining more acres than a runoff pond could handle, causing excessive runoff that damaged a home. The families are seeking compensation for what they lost, and are asking for a jury trial.

Justice Department lawsuit
The United States Justice Department filed a lawsuit in November 3, 1999, against AEP and six other companies for violating the Clean Air Act. On October 8, 2007, AEP agreed to install US$4.6 billion in equipment to reduce emission, as well as pay a US$15 million civil fine.

The company will cut 813,000 tons of air pollutants annually once all of the controls are installed. According to the press release, the agreement imposes caps on emissions of pollutants from 16 plants located in five states. The facilities are located in Moundsville, West Virginia (2 facilities), St. Albans, West Virginia, Glasgow, West Virginia, and New Haven, West Virginia (2 facilities), West Virginia; Louisa, Kentucky; Glen Lyn, Virginia and Carbo, Virginia; Brilliant, Ohio, Conesville, Ohio, Cheshire, Ohio, Lockbourne, Ohio, and Beverly, Ohio; and Rockport, Indiana and Lawrenceburg, Indiana.

Public nuisance lawsuit: Connecticut v. AEP et al.
Connecticut v. AEP et al. involves a federal public nuisance claim filed by state attorney generals and conservation groups against utilities for their large contributions to climate change and resistance to lowering greenhouse gas emissions. The case was dismissed by the district court in 2005 and then reversed by the Second Circuit court in 2009. In 2010, the Obama Administration submitted a brief urging the Second Circuit to reconsider its reversal, arguing that the issue should be addressed by the EPA, and courts should stay out.

On December 6, 2010, the Supreme Court said it will hear an appeal from defendant electric utilities, agreeing to consider ending the federal lawsuit by eight states, which asks a federal judge to order reductions in the emissions in plants in 20 states. The American Electric Power Co. and the other utilities do not want courts getting involved in the issue. The companies argue that only the Environmental Protection Agency can set emissions standards. The Obama administration, representing the TVA, want to avoid a full hearing at the high court, saying EPA regulation is a more efficient process than a federal lawsuit. The case will be argued in spring 2011. Justice Sonia Sotomayor, who was on the 2nd Circuit panel that heard the case, is not taking part in the Supreme Court's consideration of the issue.

Active

 * Hempstead (sponsored by Southwestern Electric Power Co, SWEPCO, a subsidiary of American Electric Power)

Cancelled

 * Mountaineer

Existing coal-fired power plants
AEP had 52 coal-fired generating stations in 2005, with 26,595 MW of capacity. Here is a list of AEP's coal power plants with capacity over 100 MW: In 2006 and 2007 coal accounted for 85% of AEP's energy source, and 86% in 2008.

In 2005, AEP's 21 major coal-fired power plants emitted 155.3 million tons of CO2 (2.6% of all U.S. CO2 emissions) and 1,037,000 tons of SO2 (6.9% of all U.S. SO2 emissions).

Through subsidiaries, AEP owns, leases, or controls more than 9,000 railcars, 726 barges, 18 towboats, and a coal handling terminal with 18 million tons of annual capacity to move and store coal for use in its generating facilities.

May 2010: AEP to run 10 coal units part-time
In May 2010, American Electric Power announced it planned to run 10 small coal-fired power units on a part-time basis starting in June as "the weak economy reduced demand and low natural gas prices have made the use of some coal units less profitable," according to the company.

The units include:
 * Picway 5
 * Muskingum River 4
 * Clinch River 3
 * Tanners Creek 1
 * Tanners Creek 2
 * Glen Lyn 5
 * Glen Lyn 6
 * Philip Sporn 3
 * Philip Sporn 4
 * Philip Sporn 5

Mountaineer carbon capture and storage project
AEP is planning a carbon capture and storage test project at its Mountaineer plant in West Virginia. Using a chilled ammonia process developed by French-based Alstom, the company hopes to capture one percent of the plant's CO2 emissions and store it 2 miles underground in nearby deep saline aquifiers. AEP CEO Michael Morris estimated that if the technology proves effective on a large scale, retrofitting existing plants will raise consumer electric rates from 5 to 15 cents per kilowatt hour. Morris hopes to have the test site running in 2009.

In August 2009, AEP announced its application for funding from the U.S. Department of Energy's Clean Coal Power Initiative. The company is asking for a $334 million grant to cover about half of the estimated costs of installing carbon capture and storage system at Mountaineer. According to the grant application, the system will capture at least 90 percent of the carbon dioxide from 235 MW of the plant's 1,300 MW total capacity. The captured carbon dioxide, which is expected to be about 1.5 million metric tons per year, will be injected into geologic formations about 1.5 miles under ground. The company says it will have the system operational in 2015.

American Electric Power Service Corporation Settlement
On October 9, 2007 the U.S. Department of Justice and the U.S. EPA announced that American Electric Power (AEP) agreed to pay a $15 million fine and spend $60 million on projects to mitigate the adverse effects of its past emissions. Of that $60 million, the EPA announced that it would be split 60%/40% between the United States and the various settling states. The company agreed to cut 813,000 tons of air pollutants each year at an cost of more than $4.6 billion.

It was the largest environmental enforcement settlement in U.S. history. AEP will install pollution control equipment to reduce and capture sulfur dioxide (SO2) and nitrogen oxide (NOx). The settlement resolved a lawsuit filed against AEP in 1999 for violating the New Source Review of the Clean Air Act. A coalition of eight states and 13 citizen and environmental groups joined the U.S. government in the settlement. A total of 16 plants located in five states were impacted.

“The AEP settlement will have an unprecedented impact on air quality in the eastern United States,” said Ronald J. Tenpas, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division. “This settlement is a major victory for the environment and public health, and it demonstrates our continued commitment to vigorous enforcement of the Clean Air Act.”

American Electric installed three "scrubbers" at its largest power-generating unit at its John Amos Plant in West Virginia. The total cost of the project is estimated to be $1.04 billion.

"[The scrubbers are] going to provide a different look to the skyline. The plume will look different," said Phil Moye, spokesman for American Electric Power subsidiary Appalachian Power. "I describe it as a rolling, billowy, cloud-like plume. It's white. It will come from the new stack that was constructed as a part of the project."

Ohio Power seeks 2010 retirement of Sporn Unit 5
In October 2010, Ohio Power Co. filed an application with the Public Utilities Commission of Ohio for the approval of a December 2010 closure of the coal-fired Philip Sporn Power Plant unit 5, Ohio Power parent American Electric Power said in a Nov. 1 Form 10-Q filing. Sporn has five coal units, with unit 5 having 450 MW of operating capacity and an in-service year of 1960. The plant's coal suppliers in 2010 included Keystone Development, the Mammoth Coal unit of Massey Energy, Mine Rite Coal, and Newtown Energy. In September 2009, Appalachian Power filed an integrated resource plan (IRP) in Virginia that projected a 2010 shutdown for Sporn unit 5. The same IRP projected that Sporn units 1-4, with 580 MW of total capacity, would be retired in 2018.

As part of a 2007 New Source Review (NSR) consent decree, Sporn unit 5 is required to be retired, repowered or retrofitted by Dec. 31, 2013. AEP's plan to comply with the consent decree included retirement of Sporn unit 5 at the end of 2013. But based on present and projected economic conditions, Ohio Power said Sporn unit 5 is no longer economic to operate, with the unit forecast to produce negative operating income for the next two years, bringing the company to seek 2010 retirement.

June 2011: AEP to retire nearly 60,000 MW
On June 9, 2011, AEP announced that, based on impending EPA regulations as proposed, AEP’s compliance plan would retire nearly 6,000 megawatts (MW) of coal-fueled power generation; upgrade or install new advanced emissions reduction equipment on another 10,100 MW; refuel 1,070 MW of coal generation as 932 MW of natural gas capacity; and build 1,220 MW of natural gas-fueled generation. The cost of AEP’s compliance plan could range from $6 billion to $8 billion in capital investment through the end of the decade.

AEP’s current plan for compliance with the rules as proposed includes permanently retiring the following coal-fueled power plants:


 * Glen Lyn Plant, Glen Lyn, Va. – 335 MW (retired by Dec. 31, 2014);
 * Kammer Plant, Moundsville, W.Va. – 630 MW (retired by Dec. 31, 2014);
 * Kanawha River Plant, Glasgow, W.Va. – 400 MW (retired by Dec. 31, 2014);
 * Philip Sporn Power Plant, New Haven, W.Va. – 1,050 MW (450 MW expected to retire in 2011, 600 MW retired by Dec. 31, 2014); and
 * Picway Power Plant, Lockbourne, Ohio – 100 MW (retired by Dec. 31, 2014).

In addition, six other plants which will reduce their power output:


 * Big Sandy Plant, Louisa, Ky. - Units 1 and 2 (1,078 MW) retired by Dec. 31, 2014; Big Sandy Unit 1 would be rebuilt as a 640-MW natural gas plant by Dec. 31, 2015;
 * Clinch River Plant, Cleveland, Va. - Unit 3 (235 MW) retired by Dec. 31, 2014; Units 1 and 2 (470 MW total) would be refueled with natural gas with a capacity of 422 MW by Dec. 31, 2014;
 * Conesville Power Plant, Conesville, Ohio - Unit 3 (165 MW) retired by Dec. 31, 2012; Units 5 and 6 (800 MW total) would continue operating with retrofits;
 * Muskingum River Plant, Beverly, Ohio - Units 1-4 (840 MW) retired by Dec. 31, 2014; Muskingum River Unit 5 (600 MW) may be refueled with natural gas with a capacity of 510 MW by Dec. 31, 2014, depending on regulatory treatment in Ohio;
 * Tanners Creek Plant, Lawrenceburg, Indiana - Units 1, 2 and 3 (495 MW) retired by Dec. 31, 2014; Unit 4 (500 MW) would continue to operate with retrofits; and
 * Welsh Power Plant, Pittsburg, Texas - Unit 2 (528 MW) retired by Dec. 31, 2014; Units 1 and 3 (1,056 MW) would continue to operate with retrofits.

AEP also said it purchases about 24 million tons of coal from the Powder River Basin each year, or more than a third of the coal used by the company, and that it was unclear how the potential closures would affect the utility’s purchase of coal from the Powder River Basin. At least one of the power plants due to be partially closed, the Welsh Power Plant in Pittsburg, Texas, is entirely fueled by the basin’s coal, according to AEP. The Kammer Plant that is in Moundsville, W.V., another AEP power plant slated for closure, blends the basin’s coal into the mix it burns.

Controversy over cause of plant shutdowns
The proposed plant shutdowns were announced in a June 9, 2011 press release in which AEP blamed the Environmental Protection Agency for the plant closures and said layoffs of 600 workers would result.

The announcement set off a storm of controversy. The Wall Street Journal called it a result of "EPA's War on Jobs" and said: "The real goal of the EPA's rule is to shut down fossil fuel electric power in the name of climate change. The consensus estimate in the private sector is that the utility rule and eight others on the EPA docket will force the retirement of 60 out of the country's current 340 gigawatts of coal-fired capacity."

The New York Times took a different view: "This is a deceptive and particularly cynical claim... These units are, on average, 55 years old. Some are running at only 5 percent of capacity. Many had long been slated for retirement, in part to comply with a 2007 settlement with the George W. Bush administration in which the company agreed to settle violations of the Clean Air Act by spending $4.7 billion to retire or retrofit aging units."

Shortly after, on June 27, 2011, the AP reported that AEP spent a $2 million lobbying on clean air and clean water rules in the 1st quarter of 2011, according to a disclosure report.

Financing
From June 2009 to July 2011, several banks have provided large sums of money in the form of bond underwriting to AEP, including:


 * Barclays Bank provided $300 million
 * UBS provided $190 million
 * Morgan Stanley provided $175 million
 * Citigroup and JP Morgan Chase each provided $87.5 million
 * Wells Fargo and Credit Suisse each provided $75 million

Related SourceWatch articles

 * Arkansas and coal
 * Indiana and coal
 * Kentucky and coal
 * Ohio and coal
 * Oklahoma and coal
 * Texas and coal
 * Virginia and coal
 * West Virginia and coal
 * United States and coal
 * Connecticut v. AEP
 * Michael G. Morris
 * Global warming
 * EPA Coal Plant Settlements

External resources

 * Company History
 * FollowtheCoalMoney.org
 * Oil Change USA
 * Appalachian Voices

External articles

 * Kirsty Patterson, "AEP's energy strategy: Burn coal until told otherwise," ClimateChangeCorp, May 20, 2008